At the beginning of 2019, the Procurement Department repositioned itself as Global Procurement to gain leverage, improve global standards for efficiency, standardise processes, build up competitive advantage, improve the sustainability of goods and services purchased and mitigate supply chain risks (such as enhancing our due diligence when onboarding suppliers). We also undertook a review of our procurement systems and processes to identify gaps and opportunities.
The outcome of this review highlighted a need for a more strategic and centralised focus on our spend covering the following:
The following systems and processes were introduced in 2019 and the beginning of 2020:
CNCo works with thousands of diverse suppliers globally, with the majority located in Australia, the Chinese mainland, New Zealand, Papua New Guinea and Singapore. Together with our key internal stakeholders, the Global Procurement team aims to build stronger partnerships with suppliers and ensure that they adhere to the same environmental, social and governance standards as CNCo.
CNCo's supply chain covers inter alia:
We have in place a Supplier Code of Conduct which outlines the requirements to which we expect our suppliers to adhere to. We developed the audit process for our high risk / high value suppliers to ensure full compliance with our Supplier Code of Conduct and Modern Slavery Policy requirements. Over the past few years we have focused on auditing our bunker suppliers as a priority group. We will continue working on understanding our supply chain risks, conducting due diligence on both existing and new suppliers and supply chain partners to ensure that our supply chain is fully compliant with any regulatory, environmental and H&S requirements, as well as being free of human rights violations and modern slavery.
We are in the process of designing a Sustainability programme strategy for CNCo to take a proactive approach in demonstrating business competitiveness, sustainability performance, and thoughtful supply chain management. This work will take place in 2020 - 2021, and is led by our Global Head of Procurement.
We outsource a low percentage of our ship management services to third parties. All subcontracts are carefully selected following a thorough due diligence process before we enter into any contractual relationships with them. The due diligence covers background checks during tendering exercise, and ensuring that their policies are aligned to CNCo's. We carry out regular monitoring to ensure that their practices do not deviate from our policies and Safety Management System (SMS). We also use several manning agents in various countries around the world. We conduct full due diligence on each one of them and follow up with annual internal Document of Compliance (DOC) audits as required under IMO / ILO regulations.